I'm from Norway, and I was shocked when I moved to the UK where typical notice periods is only one month. In Norway it is extremely hard to write a contract that will hold up that limits notice periods for full time non-seasonal workers to less than 3 months.
Most of the time people work out a 3 month notice period. And in fact, except in special circumstances, we generally have the right (and duty, if we want to continue to get paid through our notice period) to keep showing up for work and doing our job.
In practice, most people who are offered/asked nicely to stop coming in to work earlier will come to a suitable arrangement, but it is not very common.
When you have a generous policy like this, you have to take the good with the bad. Personally, I feel that there are many, many good, decent folks who will benefit without screwing their employer for every deadbeat who will take gross advantage of the policy. In the case of the guy who smashed up the employer's equipment - what was the loss? $2,000? $5,000? Now what's that compared to the retained goodwill of hundreds or thousands of employees who are laid off over the lifetime of the company but leave with a positive impression because they weren't escorted around like a criminal?
It's a matter of your outlook on society. Do you have trust in the public, or do you target the worst-case scenario? This is the same thing as onerous requirements for getting welfare or unemployment payments. They are focused on the 1% or less who are trying to the game the system. In the process, they are hurting the 99% who just need a hand getting through a tough time. Why optimize for a 1% case?
In the situation I described earlier, perhaps this employee's odd behavior (not showing up the very first day without even a phone call???) was a clue of larger issues that his manager should have heeded and keyed him to call in security when the time came to end his employment.
The 3 month notice period is actually not required by law, but is so widespread that most people assume it is the minimum.
The minimum mandatory notice period depends on how long you have worked there. 0-5 years (1 month), 5-10 years (2 months), 10+ years (3 months).
The notice period specified in the contract do not apply to new hires. When someone is hired they are often put on a "probation period" that can last up to 6 months. In that time you can leave or be fired with a minimum of 2 weeks notice without having to explain why. Usually the contract specifies the maximum probation period (6 months) and a longer notice (1 month).
The probation period is completely optional, but most employers include it in the contract to avoid situations like the one you experienced.
The real-world isn't this cut-and-dried, but to a lesser extent, these are the tradeoffs that the employer has to make every day.
The customary 3 month notice only applies to "permanent" employees, but the company is free to specify a 1 month notice for those employed for less than 5 years if they are not confident.
And, most Americans are very reasonable. I would never smash-up something that belonged to my employer even if I was upset. That's wrong. Most of us would just like to be treated with respect and dignity and be able to contribute to society and provide for our families and be part of our communities.
What kind of arrangement? Keep all the money but don't come in? I would think three months at a position you are leaving would be kind of awkward.
"..I obviously wouldn't want him back in the building"
I am sure he won't be back (at least for a while) because he will most likely be in prison for sometime. He was an outlier. For the most part though, people are reasonable and just want to be treated with decency when getting laid-off/fired.